The listing looks like a regular sale and not a foreclosure or anything. 

And your concern is quite valid and smart looking into the future of possible refi issues.Are you being declined for regular home loans or is the rate just something higher than you hoped?

(this is not very likely because of your lack of experience and high LTV) This lender would be in a 2nd lien position and not very secure if you fail. 

I should have funding secured for the area I'm looking at in the LA area. 

If that is the case, then it is just a matter of getting a new HELOC in place and avoiding the higher rates of a real estate secured LOC. 

this option fee is NON refundable - i would recommend 3-5% of the purchase price -  if they currently have a security deposit (which i assume they would) then you can also convert that to part of their option fee when you redo the contract / agreement with them. 

I am giving myself no more than 6 months to buy my first house.Long Term Real Estate Goals: Eventually I want the financial security that I feel I can achieve in real estate investing.

Some are even doing it on debt investments which are more secure than equity.

If you are-Not pounding the phones calling sellers daily-Not reaching out to peers daily for insight and connection-Not educating yourself through webinars, books, and commentary regularly-Not attending conferences where you learn industry trades and secrets

Offered less than market value by a long shot, secured the contract!